The weakening of the domestic economy in Namibia has resulted in sluggish vehicle sales which contracted by 23.5 percent year-to-date at the end of July 2017 to 15,523 units compared to the same period last year.

Stock broker and wealth management firm, Simonis Storm Securities (SSS) Wednesday said on a monthly basis, however, overall vehicle sales picked up by 10.3 percent to 1346 units.

“This was particularly reflected in the category of light commercial vehicles supported by continued stronger demand in the rental market, as Namibia’s tourist season continues,” said an Economist from SSS, Frans Uusiku.

According to him, while they note a moderate rebound in vehicle sales, the firm believes that this reflects a seasonal pattern and should not be construed as a reflection of an improvement in economic conditions, locally, as Private Sector Credit Extension continues to trend downwards.

“We thus expect overall vehicle sales to return on its downward spiral by the beginning of 4Q 2017 as the Namibia tourist season ends,” he said.

Despite Namibia’s central bank cutting the repo rate by 25 basis points on Wednesday, Uusiku said they do not foresee this as supporting vehicles sales.

“We believe households would require some time to adjust their disposal income and spending priorities,” he added. Enditem

Source: Xinhua/Newsghana.com.gh